Wording from estate agent’s terms

Aliss08

Hi,

Re the last sentence below can anyone advise if this is normal for agents these days?  I haven’t sold a property for such a long time but I don’t remember this 2 year time limit before.


If our instructions are terminated and the property is subsequently sold by you within a period of 6 months thereafter, to a purchaser who was introduced to the property during the period of our appointment, then our commission is payable in full. If no other estate agent is involved this time limit extends to 2 years.

Edited to say it is Sole Selling Rights as are all the local agents.

Thanks

eddddy

That's fairly standard.

Do you foresee a problem with that clause?

(It sounds like it's a "Sole Selling Rights" contract, as opposed to a "Sole Agency" contract.)

If you're getting a few estate agents round to give market appraisals, ask each of them for a copy of their contract - so you can see if one of them is 'out of line' with harsher t&cs.



Edit to add...

They should really use the correct legal wording, which  is:

if [unconditional contracts for the sale of the property are exchanged] after the expiry of the period during which we have sole selling rights but to a purchaser who was introduced to you during that period or with whom we had negotiations about the property during that period.

link: https://www.legislation.gov.uk/uksi/1991/859/made

Slinky

Cross that line through, sign against it, and it's gone. If the agent isn't happy with your amendment, go elsewhere.

I did this with our agent who sneaked 'sole selling rights' into their contract. I altered it to sole agency and they accepted it.

eddddy

Slinky said:

Cross that line through, sign against it, and it's gone. If the agent isn't happy with your amendment, go elsewhere.

I did this with our agent who sneaked 'sole selling rights' into their contract. I altered it to sole agency and they accepted it.

I think you're getting confused.

The OP is asking about the sentence at the end of their post - that sentence isn't defining the contract as being "sole selling rights" or "sole agency".  (But the wording suggests that it is probably defined elsewhere as a "sole selling rights" contract.)

Crossing out that line won't change the contract from being "Sole Selling Rights" to "Sole Agency"



The OP would need to look elsewhere in the contract, if they want to change the contract from being "Sole Selling Rights" to "Sole Agency"

GDB2222

The point is that the contract is negotiable. I certainly wouldn’t accept the two years, and I would negotiate about any other terms I didn’t like. The time to do that is now, while they want to sign you up.

eddddy

Aliss08 said:

Hi,

Re the last sentence below can anyone advise if this is normal for agents these days?  I haven’t sold a property for such a long time but I don’t remember this 2 year time limit before.


If our instructions are terminated and the property is subsequently sold by you within a period of 6 months thereafter, to a purchaser who was introduced to the property during the period of our appointment, then our commission is payable in full. If no other estate agent is involved this time limit extends to 2 years.

Edited to say it is Sole Selling Rights as are all the local agents.

Thanks

It's probably worth explaining the real implications of that clause - it could result in you paying double commission.

(And I doubt you'd find any estate agent who would agree to that clause being removed.)



That clause becomes important, if the estate agent doesn't sell your property.

When you terminate the contract, you should ask the estate agent for a list of all the people they've introduced. (If the Agent is a member of the Property Ombudsman scheme, it's mandatory for them to give you that list.)

If you instruct another agent, before signing the new agent's contract, you must give them that list and tell them in writing that 

• they must not negotiate with people on that list
• they must refer people on that list back to the previous agent,
• you will not pay the new agent any commission in relation to anyone on that list

This is the point that you might get push-back and arguments from the 2nd agent.

i.e. So on this specific issue, it's not your first estate agent's contract that is the issue, it's your second (and maybe 3rd and 4th) estate agent's contract which might need changes / additions.

GDB2222

eddddy said:

Aliss08 said:

Hi,

Re the last sentence below can anyone advise if this is normal for agents these days?  I haven’t sold a property for such a long time but I don’t remember this 2 year time limit before.


If our instructions are terminated and the property is subsequently sold by you within a period of 6 months thereafter, to a purchaser who was introduced to the property during the period of our appointment, then our commission is payable in full. If no other estate agent is involved this time limit extends to 2 years.

Edited to say it is Sole Selling Rights as are all the local agents.

Thanks

It's probably worth explaining the real implications of that clause - it could result in you paying double commission.

(And I doubt you'd find any estate agent who would agree to that clause being removed.)



That clause becomes important, if the estate agent doesn't sell your property.

When you terminate the contract, you should ask the estate agent for a list of all the people they've introduced. (If the Agent is a member of the Property Ombudsman scheme, it's mandatory for them to give you that list.)

If you instruct another agent, before signing the new agent's contract, you must give them that list and tell them in writing that 

• they must not negotiate with people on that list
• they must refer people on that list back to the previous agent,
• you will not pay the new agent any commission in relation to anyone on that list

This is the point that you might get push-back and arguments from the 2nd agent.

i.e. So on this specific issue, it's not your first estate agent's contract that is the issue, it's your second (and maybe 3rd and 4th) estate agent's contract which might need changes / additions.

The six months is pretty standard, from the contracts I have seen. The two years limit is what the op was querying, and which seems unreasonable to me. 

Incidentally, I have seen contracts with the 6 months in, but no requirement for the estate agent to provide a list of people introduced.

eddddy

GDB2222 said:

The six months is pretty standard, from the contracts I have seen. The two years limit is what the op was querying, and which seems unreasonable to me. 

The Property Ombudsman's mandatory code of practice specifies 2 years:

(And of all the potential 'nasty clauses' in an estate agent's contract - this seems like one not to worry too much about.)

At the time of receiving instructions from a seller you must:

• point out and explain clearly in your written Terms of Business that you may be entitled to a commission fee if that seller terminates your instruction and a memorandum of sale is issued by another agent to a buyer that you have introduced (see definition of effective introduction (*) and supplementary TPO ‘Dual Fee’ guidance) within 6 months of the date your instruction ended and where a subsequent exchange of contracts takes place.

• If no other estate agent is involved this time limit extends to 2 years.

Link: https://www.tpos.co.uk/images/codes-of-practice/TPOE27-8_Code_of_Practice_for_Residential_Estate_Agents_A4_FINAL.pdf

The legislation doesn't actually specify any time limit at all:

SOLE SELLING RIGHTS

You will be liable to pay remuneration to us, in addition to any other costs or charges agreed, in each of the following circumstances—

• if [unconditional contracts for the sale of the property are exchanged](3) in the period during which we have sole selling rights,even if the purchaser was not found by us but by another agent or by anyother person, including yourself;

• if [unconditional contracts for the sale of the property are exchanged](3) after the expiry of the period during which we have sole selling rights but to a purchaser who was introduced to you during that period or with whom we had negotiations about the property during that period.”

Link: https://www.legislation.gov.uk/uksi/1991/859/made

GDB2222 said:

Incidentally, I have seen contracts with the 6 months in, but no requirement for the estate agent to provide a list of people introduced.

Yep - but the Property Ombudsman's code of practice makes it mandatory:

5u
At the time of the termination of the instruction, you must explain clearly in writing any continuing liability the client may have to pay you a commission fee and any circumstances in which the client may otherwise have to pay more than one commission fee. Your explanation must include a list of parties that you have introduced to the property.

So you only need to worry if your Agent isn't a member of the Property Ombudsman Scheme.

Aliss08

Thank you for all the replies.  It’s all a little clearer now.